ASIAN AMERICAN PERSONALITIES
THE 130 MOST INSPIRING ASIAN AMERICANS
OF ALL TIME
Steve Y. Kim
ven the most successful entrepreneurs typically make their marks on the strength of having grown a single startup into a thriving industry player. Steve Kim managed to turn two startups into big paydays, including the $2 billion sale of second startup Xylan to Alcatel in 1999. Today Kim is focusing his proven expertise on helping Alcatel's venture subsidiary spot and nurture promising tech startups. The secret of his success? Wife Jung.
"My wife points out things that I overlook about myself and others," Kim once told us. "She is my most valuable asset."
The truth of that statement finds support in the chronology of Steve Y. Kim's dizzying immigrant success story. He was born in Seoul in 1952. He immigrated in 1976 after serving his mandatory two-year stint in the Corean (Korean) military and spending four years studying electrical engineering. He spent a year stocking shelves in an auto parts warehouse. He invested the meager savings from that warehouse job into a plane ticket back to Korea to marry Jung in 1977.
She promptly repaid his sacrifice with a son and a daughter, helping Kim see the need for a sharp increase in his income. A night school electrical engineering degree from Cal State Northridge landed him a job at Burroughs, then at Litton Data Systems. His third job at a small fiber-optics modem company inspired Kim to strike out and start his own garage-based company to make networking products.
When Kim sold it seven years later, Fibermux netted him a cool $54 million. The minute his two-year contract with the buyer expired in 1993, Kim started Xylan in Calabasas, California to make power-packed, versatile next-generation switches to handle hi-speed data routing for local-area-networks. The switches were the size and shape of pizza boxes, earning them the name pizza switches.
Seems the investing world was famished for a hot pizza switch. Xylan's 1996 IPO was the most successful since Netscape's. The opening price of $26 on 4.2 million offered shares quickly jumped to a high of $75. One reason was that Xylan wasn't at all like the web wonders of the day which had huge market valuations with no prospects for earning profits. By 1998 Xylan's sales had grown to $350 million in a field that included vigorous giants like 3Com, Cisco and Bay Networks. More impressively, in the face of stiff competition Xylan actually enjoyed a hefty $40 million in profits and appeared likely to continue its spectacular sales growth 1999. Investors were betting that Kim's souped up switches were ideally positioned to tap the nascent boom in hi-bandwidth cable and fiber-optics networks.
Another attractive Xylan asset was Kim himself, a hard-worker who relied heavily on his own creativity to provide many of the key engineering advances that kept his switches on the cutting edge and his 1,000-comployee company growing. He considered his creativity his main strength, and had developed a habit of waking at 5:30 to mull technical problems in bed before hitting the shower.
"I never yell and scream," he said. "Instead, I look for ways to overcome the adversity through alternatives." He had also become a stickler for staying on schedule. That meant his workdays typically didn't end before 8 p.m. and his weekly golf games always waited until the weekend.
Among those who began snapping up Xylan shares was Alcatel, France's leading telecommunications company which had embarked on an ambitious expansion plan centered on acquiring innovative American tech firms. In the spring of 1999 Alcatel made its move, offering a hefty premium over Xylan's then current share price. The $2 billion buyout was smoothly concluded later that year, giving Kim about a billion dollars as his personal payday.
For a year after the buyout Kim remained in charge of Xylan which became the core of Alcatel's Internetworking division. In January of 2000 the post was turned over to one of Alcatel's French corporate managers as Kim was named Managing Partner of the newly formed Alcatel Ventures, a venture capital fund headquartered in the Mid-Wilshire district of downtown Los Angeles. Within a year Kim added branch offices in the Silicon Valley, San Diego, Boston and Seoul. Without the burden of managing a large established business, Kim now focuses his energies on seeking out tech startups in the areas of wireless communications, computer networking, optical components, the internet and telecom infrastructure.
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Steve Kim was one of the Top 20 Asian American entrepreneurs featured in Transpacific Magazine (No. 65).
“I never yell and scream. I look for ways to overcome adversity through alternatives.”
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